Dr Pepper Snapple (DPS+0.7%) held a conference call to discuss its pickup of Bai Brands.

Execs said the company's overall corporate strategy is unaltered and there is no change to dividend or buyback policies. They also highlighted that Bai gives Dr Pepper a solid vehicle to test drive online selling channels.

Bai is expected to churn up $79M in operating income next year. Over the longer haul, Dr Pepper expects Bai sales to double in the next few years.

The cash purchase price includes a tax benefit of approximately $400M on a net present value basis and will be financed through new unsecured notes and short term commercial paper.

The company says Bai provides a strong platform to incubate and grow better-for-you beverages throughout the non-carbonated and carbonated beverage sectors.

The deal is expected to generate approximately $425M in net sales in 2017 and add an incremental $132M to current net sales expectation for 2017. The transaction is expected to be approximately $0.03 dilutive to reported EPS in 2017 and accretive to reported EPS in 2018.

"Bai has contributed greatly to our allied brand lineup since we began distributing it broadly in 2013. Adding it to the broad range of choices and options in our company-owned portfolio is a natural next step," says a top DPS exec..

Other beverage stocks with a head of steam include National Beverage Corporation (FIZZ+4.2%), Boston Beer (SAM+2.2%), Molson Coors (TAP+1.9%), Dr Pepper Snapple (DPS+1.8%) and Jones Soda (JSDA+2.8%). Leading Brands (LBIX+12.1%) moved higher after a bullish Seeking Alpha article went live.

It's not clear why the names are attracting so much attention today from investors (M&A intrigue?), but as a group beverage stocks are the top performer in the consumer goods sector.

Researchers from Harvard University estimate that soda consumption could fall as much 20% in select California cities if a soda tax is passed on November 8. The same study predicted a 4% drop in diabetes cases as a result of soda taxation.

California voters in San Francisco, Albany and Oakland are voting on the tax, as well as voters in Boulder, Colorado. The issue is also going in front of the Cook County Commission (Chicagoland) soon for a decision over what's openly being called a political money grab.

The beverage industry had a very strong record of turning back soda tax initiatives, but saw a setback when the Philadelphia City Council approved a $0.015-per-ounce soda tax last June.

Dr Pepper Snapple (NYSE:DPS) is down sharply after Evercore ISI moves to a Hold rating from Buy.

It's a rather sharp move with four bullish ratings (Credit Suisse, Credit Agricole, Sterne Agee, Stifel Nicolaus) still out on the beverage stock. SA contributor Horizon Investments also presented a positive outlook on Dr Pepper in a recent article.

DPS is off 4.55% to $86.63 vs. a 52-week trading range of $80.44 to $98.80.